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                                                                    EXHIBIT 10.3

                         INTERMOUNTAIN COMMUNITY BANCORP
                         EMPLOYEE STOCK OPTION AGREEMENT

         THIS EMPLOYEE STOCK OPTION AGREEMENT ("Agreement") is entered into by
and between Intermountain Community Bancorp ("Bancorp") and the Employee, named
below, on ______________, _______________.

         Employee:______________________________________________________________

         Option Shares:_________________________ Exercise Price:________________

         Date of Grant:_____________________Date of Termination:________________

         Vesting Schedule: This Option will become exercisable as to ___________
         Shares on each of the first ____ anniversary dates from the Date of
         Grant.

1.       Pursuant to Bancorp's Second Amended and Restated Employee Stock Option
         and Restricted Stock Plan (the "Plan") and subject to the terms of this
         Agreement, Bancorp hereby grants to Employee an option ("Option") to
         purchase shares of the common stock of Bancorp, as provided herein.

2.       The Option granted hereunder is a:

         [ ]      Nonqualified Stock Option; or

         [ ]      Incentive Stock Option

3.       Pursuant to this Option, the Employee has the right, but not the
         obligation, to purchase the stated number of Option Shares of the
         common stock of Bank at the Exercise Price, payable on the date of
         exercise. This Option is granted as of the Date of Grant and shall
         terminate on the Date of Termination unless sooner terminated by reason
         of death, disability or other termination of status as an employee as
         provided in the Plan.

4.       This Option shall be exercisable according to the Vesting Schedule set
         forth above. Option Shares as to which this Option becomes exercisable
         are called "Vested Shares." This Option shall be exercisable as to
         Vested Shares in whole or in part at any time between the Date of Grant
         and the Date of Termination of this Option. Notwithstanding the
         foregoing, if the Optionee's status as an employee terminates, then
         this Option will cease to vest and will not become exercisable as to
         any additional shares, as of the date on which the Optionee's
         employment terminates. In such case, this Option will be limited to the
         Vested Shares as of such date of the termination of employment.

5.       This Option must be exercised by actual delivery to Bancorp of a
         written notice of exercise signed by Employee specifying the number of
         shares with respect to which this

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         Option is being exercised and the per-share Exercise Price, accompanied
         by payment of the full amount of the Exercise Price for the number of
         shares being purchased.

6.       All terms and conditions of the Plan are hereby incorporated by this
         reference as a part of this Agreement, including but not limited to the
         "Terms and Conditions of Options" provided in the Plan. In the event of
         a conflict between the terms or conditions of this Agreement and the
         terms or conditions of the Plan, the terms and conditions of the Plan
         shall govern.

7.       All shares of Common Stock acquired by Optionee pursuant to the
         exercise at any time of this Option shall be subject to the right of
         first refusal of Bancorp described in this paragraph 7.

            a.    In the event Optionee proposes to sell, assign or otherwise
                  transfer any shares of Common Stock acquired hereunder to any
                  person(s) in a bona fide sale, the Optionee shall submit in
                  writing to Bancorp a notice ("Notice of Proposed Sale") that
                  identifies the number of shares of Common Stock that the
                  Optionee proposes to sell, the person(s) who proposes to buy
                  such shares, the sales price for such shares and all other
                  material terms and conditions of the proposed sale. For a
                  period of thirty (30) days from the date it first receives the
                  Notice of Proposed Sale ("Repurchase Period"), Bancorp shall
                  have the right, but not the obligation, to purchase all, but
                  not less than all, of the shares of Common Stock that the
                  Optionee proposes to sell at the sales price identified in the
                  Notice of Proposed Sale.

            b.    If Bancorp wishes to exercise the right of first refusal
                  identified in paragraph 7.a to purchase the shares of Common
                  Stock that Optionee proposes to sell, it shall give to
                  Optionee a written notice of exercise to that effect within
                  the Repurchase Period; and the purchase and sale of such
                  shares of Common Stock shall close within ten (10) days after
                  the time Bancorp gives such written notice. At such closing
                  Bancorp shall pay the sales price, in full, in cash or cash
                  equivalent.

            c.    If Bancorp does not give the notice of exercise described in
                  paragraph 7.b within the Repurchase Period, or if it waives
                  its right of first refusal identified in paragraph 7.a, then
                  Optionee may sell the shares of Common Stock identified in the
                  Notice of Proposed Sale to the person, at the sales price and
                  subject to all other terms and conditions identified in such
                  notice; provided, however, that if such sale by Optionee does
                  not close within thirty (30) days following the expiration of
                  Bancorp's right of first refusal, then the shares of Common
                  Stock identified in the Notice of Proposed Sale shall again be
                  subject to all the provisions of this paragraph 7.

            d.    Prior to the time that the Option Shares are first sold to any
                  person at fair market value in a bona fide sale, the shares
                  shall continue to be subject to the restrictions set forth in
                  this paragraph 7, as if the person who proposes to sell those
                  shares were the Optionee.

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            e.    All sales, assignments or other transfers of shares of Common
                  Stock in violation of the right of first refusal described in
                  this paragraph 7 shall be void.

8.       Each certificate representing shares of Common Stock shall be endorsed
         with a legend substantially as follows:

            THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            THE RESTRICTIONS AND RIGHTS OF FIRST REFUSAL SET FORTH IN AN
            EMPLOYEE STOCK OPTION AGREEMENT DATED _______________, A COPY OF
            WHICH IS ON FILE AT THE OFFICE OF BANCORP AND THE PROVISIONS OF
            WHICH ARE INCORPORATED HEREIN BY REFERENCE.

9.       Miscellaneous

            a.    Successors in Interest. This Agreement and all of its terms,
                  conditions and covenants are intended to be fully effective
                  and binding, to the extent permitted by law, on the heirs,
                  executors, administrators, successors and permitted assigns of
                  the parties hereto.

            b.    Spousal Consent. If the Employee is married, the Employee
                  shall obtain the signature of the Employee's spouse as set
                  forth on the Consent of Spouse below. The Employee's failure
                  to obtain such consent shall constitute a representation by
                  the Employee, on which Bancorp shall rely, that the Employee
                  is unmarried and that the Employee has sole authority with
                  respect to the Employee's actions regarding the Shares.

            c.    No Right to Employment. Nothing in this Agreement shall affect
                  in any manner whatsoever the right or power of Bancorp to
                  terminate the Employee's employment with Bancorp, or the
                  Employee's ability to quit Bancorp's employment, with or
                  without cause, at any time.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.

EMPLOYEE:                               INTERMOUNTAIN COMMUNITY BANCORP,
                                        an Idaho corporation

_____________________________________   By:_____________________________________

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Print Name:__________________________   Title:__________________________________

I hereby acknowledge that I have received a copy of the Plan, incorporated by
reference above.

___________________________________________________

Print Name:__________________________ Employee

                             SPOUSAL ACKNOWLEDGEMENT

         The undersigned spouse of Employee has read and hereby approves the
foregoing Agreement. In partial consideration of Bancorp granting to Employee
the right to acquire the Option Shares in accordance with the terms of this
Agreement, the undersigned hereby agrees to be irrevocably bound by all the
terms of such Agreement, including, without limitation, the right of the Bancorp
to purchase any Option Shares of Employee pursuant to this Agreement.

_____________________________________________________________

Print Name:____________________________ Employee's Spouse

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